Question

Are part from these (horizontal analysis, vertical analysis, ratios for measuring financial health ) what ratios would you deem important to evaluating any specific financial statements and subsequent organization's financial position?

Answer 1

ratios to be evaluated for measuring fiancial statements and organisation financial performance are as follows - :

1.Asset turnover ratios: indicate how efficiently a company is using its assets.

ATR = net sales / average total assets

2.Liquidity ratios: provide information on the company’s ability to comply with its financial obligations.

for example current ratio = current assets / current liabilities

3.Debt-Equity Ratio - measures the percentage of external resources over the total amount of the company’s own resources.

Debt equity ratio = Total Debt / Shareholders’ Equity

4. Return on Equity - ells you how much profit the company can earn from your money.

ROE = net income / shareholders equity

5. Net Profit Margin - it indicates the efficiency of a company at its cost control.

net profit margin = Net Profit / Net Sales